Whale Watch: What Big Funds Are Buying—And Selling
The market's biggest investors were put to the test in the second quarter, with their latest regulatory findings showing a variety of moves to combat a falling stock market.
The second quarter was a difficult one for stocks and hedge funds. The benchmark S&P 500 fell 3.3 percent in the period, while funds on average lost 2.7 percent in the quarter.
The filings from hedge funds, submitted to the Securities and Exchange Commission throughout the day Tuesday, will no doubt reveal some of that tumult in the stock market.
Hedge fund giant Leon Cooperman pulled back large stakes he had in some of America's biggest banks and took a big position in energy exploration in the second quarter, according to his latest regulatory findings.
In the period ended June 30, the head of Omega Advisors exited his position in Bank of America, slashed his holdings in JPMorgan Chase by about two-thirds and slightly pared his stake in Wells Fargo.
JPMorgan has had a difficult quarter after revealing its losses from the so-called London Whale's trading debacle.
The positions were revealed in Cooperman's latest 13F filings with the Securities and Exchange Commission, which had to be submitted Tuesday.
Besides his dimmed view on banks, Cooperman scooped up more than 7.1 million shares in McMoRan Exploration, which saw its shares surge 60 percent since mid-May.
Cooperman's largest positions in valuation terms remained with Atlas Pipeline (5.2 million shares), Linn Energy (4.7 million) and Apple (266,000 shares).
Earlier indicators from the quarter pointed to the big investors — "whales" — having a rough quarter as the stock market stumbled.
Warren Buffett's Berkshire Hathaway reported increased stakes in Viacom and Liberty Media, while it cut its allocations toward Johnson & Johnson, UPS and General Electric. Berkshire dissolved its interest in Intel.
Read More: Buffett's Berkshire Slashes Stock Holdings
Also, Jim Chanos at Kynikos Associates, reflecting the disaprity of opinions among the big investors, upped shares in JPMorgan and Citigroup while adding technology exposure through Microsoft and Oracle.
Despite Cooperman's moves, the flavor of the second quarter for big U.S. money managers was bank stocks, including Morgan Stanley and Citi.
Hedge funds Eton Park Capital and BlueMountain Capital Management were among investors that scooped up financials, which as a group are up 15 percent this year.
Energy companies were also in the spotlight. Activist hedge fund Jana Partners soured on energy stocks as the firm dumped shares of Marathon Petroleum and Hess, while Eton Park's Eric Mindich revealed that he has an option to buy 4.5 million shares of natural gas producer Chesapeake Energy at an undisclosed price.
Carl Icahn also added a sizeable stake in Chesapeake Energy and dissolved his stake in Motorola Mobility Holdings but had few changes otherwise.
BP Capital, the investment management firm led by billionaire energy investor T. Boone Pickens, sold all of its holdings in number two U.S. gas producer Chesapeake Energy and oil major BP .
The firm also sold its full holdings in two oilfield services companies and a liquefied natural gas tanker operator, filings showed.
BP Capital sold 499,055 shares in Chesapeake, valued at $11.56 million as of March 31, between the first and second quarters.
Pickens had said in May, after the firm filed its first-quarter holdings with the SEC, that he was selling all his Chesapeake shares because of falling natural gas prices, CNBC reported.
New York Mercantile Exchange natural gas prices hit decade lows in the spring.
A spokesman for BP Capital did not immediately reply to a request for comment.
BP Capital's total stock holdings between the first and second quarters declined by about 25 percent to $130 million at the end of the second quarter.
George Soros also picked up energy shares, buying stock in Anadarko Petroleum and purchasing 700,000 shares of Ancestry.com, while exiting his position in CapitalOne Financial .
For more on how big money managers traded in the sector quarter, here is a breakdown by sectors and high-profile stocks.
Eton Park's Mindich said he owned 5.1 million shares of Morgan Stanley and had the right to acquire another 21.5 million shares at an undisclosed price. At the end of the first quarter, he owned 15 million shares.
Mindich also made changes in his holding in Citigroup, in which he owned 5.5 million shares at the end of the first quarter and said he had the right to acquire 12.7 million shares at an undisclosed price at the end of second quarter. At the end of the second quarter, he still held warrants to acquire 102.4 million shares, the same number he held at the end of the first quarter.
BlueMountain Capital initiated a new position in Citi, roughly 623,000 shares, and increased its stake in Flagstar Bancorp by 250,000 shares. It owned 233,505 shares of JPMorgan Chase at the end of the second quarter, up from 80,910 shares.
Not everyone was a fan of banks, however.
Dinakar Singh's TPG-Axon Capital Management sold its holdings in JPMorgan, which reported an unexpected and enormous trading loss this year from the infamous "London Whale" trade. Singh no longer listed JPMorgan as a holding after owning 3.1 million shares during the first quarter.
Blue Mountain Capital appeared to be betting on a revival of the housing market and opened a new position in the quarter in KB Home , buying 876,165 shares of the home builder. Meanwhile, Jana bought 6.2 million shares of American Realty Capital, a real estate investment trust.
Jana, led by Barry Rosenstein, exited its position in Marathon Petroleum , which had been the fund's largest stock holding at the end of the first quarter. The fund also sold all of it shares in Hess, another oil company.
Tom Steyer's Farallon Capital made a big adjustment to its holding of gas pipeline company Kinder Morgan. In the first quarter it held 22.5 million shares but at the end of the second quarter it owned 4 million shares and had warrants to acquire an additional 5.2 million shares.
Food and Agriculture
Jana opened a new position in Canadian fertilizer company Agrium, buying 6.5 million shares.
Philippe Laffont's Coatue Management was bullish on burritos and tacos in the second quarter, adding 185,000 shares of Mexican restaurant chain Chipotle , bringing its total holdings to 567,102 shares.
The first well-known fund to disclose a significant position in Facebook in the period was Chase Coleman's Tiger Global Management with 1.96 million shares. The hedge fund was a pre-IPO investor in the social networking company. George Soros also reported owning 341,000 shares in Facebook.